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While digital transformation is the current buzzword, realistic service providers must balance business, operations and technology transformation.
July 31, 2018
The current obsession with “digital transformation” is not confined to the telecom sector. The potential changes in organizational structures, technology deployed and subsequent services supporting digital business models are dramatic and wide-ranging. In fact, we can no longer just think about the impact of change in the telecom sector itself. The industry was formerly very self-contained, self-ruled and self-obsessed. Organizationally, it has been guilty of building very independent silos. The lines of business have increasingly found themselves in conflict with the corporate network and IT functions, and technology is allowing them to do their own thing despite the ‘wisdom’ passed down from on high. The digitalization of technology, processes, systems and now services exposes the industry to a whole range of outside parties that want to exploit the benefits of ubiquitous, high-speed and highly reliable services as part of their own digital transformations.
A digital transformation strategy in the telecom industry is a careful balancing act between business, operations and technology. Service providers really need to figure out the needs of each component. The puzzle is exacerbated by advice coming in at every level, not to mention countless integrators at the intermediate levels. It’s not a small undertaking and needs to have a mutually agreed end-goal.
Decision-makers must establish the focus, but there are several angles to consider.
- Improve operational efficiency by removing legacy barriers of technology and work practice?
- Simplify service portfolios offered directly and indirectly to consumers and business customers?
- Identify new revenue streams and expand into adjacent markets?
While the grass may appear greener in other markets, if a telecom service provider doesn’t focus on reducing the complexity of its portfolio, systems, processes and services, then the chance of building new service and revenue lines is improbable. The next generation of services will require an enormous range of agility, bandwidth, response-time, analytics and an open attitude to APIs in order to embrace the partners in emerging ecosystems and business models.
The new baseline for the telecom industry is a programmable platform built on a combination of formerly separate network and IT infrastructure with the ability to use APIs from within telecom, IT and the verticals that operators are serving. This requires service providers to shift their perception of themselves into digital service enablers, offering partners and customers the toolkit to build any service. This is not the old posturing of the world’s telecom service providers, but a new breed of operator which embraces how partners and customers want to work rather than how the “propeller heads” think technology should be deployed.
With this in mind, service providers must accept a combination of technological, operational and business transformation streams. In the past, these would have been kept separated from each other, often resulting in failed programs. Awareness of other project streams is critical to the success of the company’s transformation that will allow it to play in the digital world.
The good news is that networking and IT systems, as well as BSS and OSS, are now being built with agility at their cores. Simplification, all the way through the portfolio, process and systems levels, will pave the road ahead.
New levels of flexibility enabled by virtualization and the cloud give service providers a massive opportunity to build the platform for the future. In most transformation examples, however, it is not the technology that provides the critical success factor, but the cultural change needed to move organizations forward, break down silos and deliver customer-centric services. The company mantra should be about customers, allowing the business to build a new brand, new offerings and a better position in the market.
In short, “digital” is the current label, but a fundamental transformation of the telecom organization, infrastructure and portfolio is what’s at stake. Furthermore, a more pragmatic approach to partnering and accepting an enabler role in the emerging landscape for B2B2X services is essential. Broadband—fixed and mobile—forms a vital part of the expanded future of connected everything. But, from outside of the telecom bubble, it is seen as mere plumbing. So, building the portfolio, systems and processes to support that role must reflect the economic reality of being a player and not clinging on to believing that ownership of the ecosystem is the goal.